Posts Tagged Letter Of Marque

I really liked this presentation because it brings in all of the elements that I have been talking about on this blog, into a nice format that Dr. Sean McFate has put together. It is definitely worth your time to watch and absorb.

The thing that stood out to me was the discussion of the strategic uses of private forces or PMSC’s. He presents the case that A. the industry is not going away B. we are reverting back to a pre-westphalian era, and C. that the west might not want to use PMSC’s for waging war, but other countries like China or Russia have no issue with them.

It is that dynamic that is interesting to me. That countries are slowly going towards the use of PMSC’s to wage war, and they are doing it as a part of their national interest. Russia for example used their little green men hybrid warfare strategy in the Ukraine. Iran uses mercenaries in Syria. And then there is China and their use of maritime militias. Even with the west, contractors have been used in Iraq and Afghanistan as a way to supplement manpower shortages in this wars. The common theme here is that private forces are used as a part of a larger ‘strategy’, and this presentation challenges those who are closed minded or unaware of those uses. It forces the viewer to think about how PMSC’s are used, or could be used, strategically.

In the past, I have discussed all sorts of interesting ways that private forces have been used for the sake of national interest. The very first overseas land operation of the US was the Battle of Derna (Shores of Tripoli from the Marine Hymn) in Libya, where a small contingent of Marines/Army commanded several hundred Christian and Islamic mercenaries to fight in the First Barbary War. The early privateers that the US used in the Revolutionary War and War of 1812 were another example of the use of PMSC’s as a part of a larger strategy to support national interest. The Flying Tigers was another example of modern aviation PMSC’s, or Britain’s Watchguard International Lmtd. in Yemen, or even recently with STTEP in Nigeria. Private forces can be used to great effect, and there are historical cases that make this point.

Sean covers a broad scope of ideas, and they are provocative to the say the least. What I wanted to post was the ten ideas of this future war he describes. Bear in mind, he is mostly referencing what is going on right now, and trying to envision where this goes with each point.

1. There will never be ‘symmetry’.

2. Technology won’t save us.

3. States matter less.

4. Warriors are masked and may not fight for states.

5. Laws of war and international law don’t apply.

6. There will be a market for force with mercenaries.

7. Others will wage war and new kinds of superpowers will emerge.

8. Plausible deniability is power.

9. Hearts and minds matter very little.

10. There will be more war.

I won’t ruin the whole thing for the reader, but I did want to comment on one deal he brought up that is not discussed a lot out there. He mentioned ‘hack back‘ companies, or basically cyber companies contracted to attack hackers or countries that used hackers to attack those companies. To me, this is pure cyber privateering, and we are getting close to the concept of state sanctioned hacking as this becomes more of a problem. I am reminded of the attack on Sony, and how brutal that was. Or worse, hacks on nuclear facilities…. In the past I have talked about how the Letter of Marque could be used for this as a means of keeping it in check. As more companies or countries get attacked by hackers who are sponsored by states, the idea of attacking back becomes more and more a thing to consider. For a further exploration of cyber privateering, I suggest the Morgan Doctrine blog. Interesting stuff and check it out below. If you are interested in further exploring this topic, I highly recommend Sean’s book called The Modern Mercenary: Private Armies and What They Mean for World Order. –Matt

What better way to start the new year off than with a post about another private navy? lol The last couple of years, I have been posting about the Jardine Lloyd Thompson CEP ‘private navy’. With that venture, they made a lot of promotional announcements, but never got it off the ground. Funding of such a thing is the problem, and we will see how this new private navy venture by Typhon does in their drive to get set up.

So lets look at the business model, as was stated by Typhon in January of last year.

“A huge difference between our model and others is that we will negotiate reduced insurance rates. Rates have skyrocketed because it’s costing the industry $10bn-$12bn a year when you add everything up. Ransoms alone are $800m-$1.2bn.” South Korea reportedly paid $25m to reclaim a ship last year. “And then that’s the new bar. It throws out Lloyds’ actuarial valuations,” says Sharp. “You have no idea what to charge as a premium. For my clients, we can take out some of the risk. I’ve got a letter from a Lloyds broker saying we can offer a 50pc discount on rates. That more than caters for our services.”

You know, in fairness to potential clients, the company should post that letter from Lloyds on their website. Matter of fact, they should do a lot of things with their website in order to spell out exactly what they are all about because it is ‘vacant’.

Furthermore, when a company puts it out there that it is recruiting 240 former Royal Marines, you kind of think there would be some talk of that within the industry? I haven’t heard anything about it, nor is there any lively talk about it over at Close Protection World. I would also like to see this recruitment advertisement or maybe even a recruitment career page on their website, but there is nothing.

I do know that their website is registered in the UAE and supposedly they are based in Abu Dhabi. I do know that they made a promotional video for the company and concept, and you can watch that over at the gCaptain’s website here.

According to the article last year, they have brought on some interesting folks to run this navy. Here is the list.

The ribs will be manned by ex-Royal Marines, as will the group’s base in Abu Dhabi. Murray, a former French Foreign Legionnaire, will be Typhon’s chairman, with Lord Dannatt a non-executive. They will be joined by non-executives including General Sir Jack Deverell, former commander of Allied Forces Northern Europe; Admiral Harry Ulrich, ex-head of US naval forces in Europe; and Peter Ahlas, former chief of HSBC’s marine and insurance business. It’s quite a roll-call for a company that’s just completing its first fund-raising, of just $15m, and has yet to put to sea.

On a side note, Simon Murray has an interesting background. He did a stint in the French Foreign Legion. He is also a power broker and wealthy enough to make a project like this work. He is also partnered up with a non-military guy who I guess was the one that came up with the idea of Typhon. Here is the quote.

But Sharp himself is new to the all-action side of things. His career has seen him invest in start-up travel ventures from lastminute.com to GoAmerica, take AIM minnow Cashbox public, and launch Earthshine, a commodities distributor. “I had the idea for Typhon playing polo one afternoon, thinking about what my next business might be,” says Sharp. “I picked on maritime security. Two years later we’re completing our funding round, acquiring our first vessel in weeks, and hope to be in theatre shortly after.”

It is always funny to me when you hear about the inception of an idea, like with Sharp’s statement of ‘while playing polo one afternoon, thinking about what my next business might be…’ lol Polo or golf, it seems like a lot of ideas for businesses get their start during play.

No mention of a Letter of Marque being issued either. Here is what was mentioned, and it would be cool to hear more about the legal side of this private navy.

The Britons intend to sail under a sovereign flag which will give them the legal right to carry their weaponry into harbour, rather than cache them on platforms in international waters.

Interesting stuff and I wish the company luck in their goal of firing up a private navy. –Matt

BRITAIN’S first private navy in almost two centuries is being created by a group of businessmen to take on the Somali pirates who are terrorising an expanse of the Indian Ocean.
Its armed vessels – including a 10,000-ton mother ship and high-speed armoured patrol boats – will be led by a former Royal Navy commodore. He is recruiting 240 former marines and other sailors for the force.
It will escort its first convoy of oil tankers, bulk carriers – and possibly an occasional yacht – along the east coast of Africa in late March or April.
Typhon, the company behind the venture, is chaired by Simon Murray, a millionaire businessman who joined the French Foreign Legion as a teenager and walked unsupported to the South Pole aged 63.
Typhon has been set up because the Royal Navy, NATO and the European Union Naval Force lack the vessels to patrol an area of ocean that is as large as North America, said Anthony Sharp, chief executive. “They can’t do the job because they haven’t got the budget and deploying a billion-pound warship against six guys [pirates] with $500 of kit is not a very good use of the asset,” he said.

“In 2011, the numbers of private armed security teams went up significantly and that has been a big game-changer as well, though not the only factor,” Olive said. “If that pressure is taken off it can all start to be unpicked relatively rapidly,” he added, referring to industry and military measures to combat piracy.

It’s nice to see some recognition going towards the efforts of armed security out there. They have been a ‘big game-changer’ and the statistics speak for themselves.

Although one looming iceberg that can really mangle the record of private armed guards are shootings that result in innocent people being killed. I have to imagine that we will see private maritime security industry involved in such a thing, and an example of how that might turn out can be seen with the shooting accident that happened last February between some Italian Marine vessel protection guards and an Indian fishing vessel.

In that accident, one innocent person was killed, and it is the type of deal that has been all over the news in both India and Italy. This kind of international incident would literally destroy a security company and absolutely embarrass the client. But it would also be the kind of incident that would put some extreme negative attention on the maritime security industry as a whole. The question is how do you prevent something like that from happening, and can you?

Logically speaking, it is bound to happen. So the prudent thing for companies is to actually prepare your legal strategic defense for such an event. To study how this specific event between the Italians and Indians, and learn from it to get a good game plan together. Of course you always want to refine your rules of engagement and enforce it with training and good management/leadership, but in the realm of combat, unfortunate things happen and companies must be prepared.

One final point is the use of the Letter of Marque (LoM) or a similar licensing system. This could be used as a form of protection for those armed guards on the high seas. If the ship’s captain carries a LoM for that vessel, issued by the same state the vessel is flagged under, then in that case the state can identify through that license what they are legally willing to support when it comes to the defense of that vessel. Under the terms of the LoM, you can list all sorts of requirements of the vessel’s protection team, and you can write up legal protections for that team and vessel.

The main point of this type of LoM is to get the state back into the game of regulating armed force on these vessels and provide some kind of legal protections and accountability. If states are willing to put their flag on a vessel, then why not go the whole way and allow them to issue a LoM or similar license for this kind of ‘warfare on the high seas’? –Matt

Piracy plunges as more ships start carrying armed guards
November 30, 2012
By Michelle Wiese Bockmann
Pirate attacks on merchant vessels in the Gulf of Aden and the Indian Ocean fell 81 per cent this year as the use of armed security guards on ships acted as a “game-changer,” according to the European Union’s naval force.
There were 34 attacks by Somali pirates, with five vessels hijacked so far in 2012, compared to a record 176 assaults in the whole of last year that resulted in 25 ships seized for ransom, according to Peter Olive, the EU Naval Force’s chief of staff.
Ransom payments to Somali pirates totaled $36 million so far this year, compared with $147 million last year, he said Thursday at a briefing at the EU’s naval force headquarters at Northwood, England. As well as more aggressive military operations, the increasing deployment of private guards over the last 18 months on vessels transiting high-risk areas contributed to the declines, Olive said.
“In 2011, the numbers of private armed security teams went up significantly and that has been a big game-changer as well, though not the only factor,” Olive said. “If that pressure is taken off it can all start to be unpicked relatively rapidly,” he added, referring to industry and military measures to combat piracy.

This is a great concept for a game. Take these two security contractors and veterans of the middle east, and put them up against the cartels down south. Here is a quick description about the game.

You’ll face off against the world’s most vicious drug cartel in Army of TWO The Devil’s Cartel. Take part in a private military operation against The Scythe, a wide-spread criminal operation that has brought murderous terror to the besieged nation of Mexico. Lead your own insurrection as you battle tenacious foot soldiers and ruthless drug lords in a story that’s ripped from today’s headlines. Do whatever it takes to end the corrupt cartel’s stranglehold over the country, and bring the head of The Scythe to swift and bloody justice. The Army of TWO may be vastly outnumbered by the villainous Devil’s Cartel, but they certainly will not be outgunned.

Man, it almost seems like the guys at EA are reading this blog. lol I have been talking about private industry, armed with letters of marque, operating within a well constructed offense industry, and used against the cartels for awhile now.

What is cool here is that this game further demonizes the cartels and allows the gaming public to participate in their destruction. It also brings up the concept of using private industry to take care of a problem. Even if the reality of doing such a thing is remote, or that private industry would probably approach it in a less dramatic and violent fashion, it is the idea of such an action that is significant. Very cool and we will see how it sells. –Matt

“We are breaking new ground here,” Otto said. “We mainly have foreign companies that operate in international waters.” The German government estimates that British and US companies in particular could apply for a license.

This is interesting and I really liked the quote up top. To have a German ‘Letter of Marque’ or a license would be pretty cool. Although on the down side, I did not like the limitations that the Germans were putting on weapons use.

Weapons for the private ship protectors will have to be registered separately. The law stipulates that no heavy military weapons can be employed. Semi-automatic weapons, though, could be permitted.

So the pirates can operate heavy military weapons for attacks, but armed security defending these boats are not allowed too have them? And what exactly is the German definition of ‘heavy military weapons’?

The other point that was kind of interesting is the license fees and process.

The Federal Office of Economics and Export Control (BAFA) will most likely be the office in charge of the procedure. It will be able to call in the Federal Police for consultation. Security firms will have to pay between 8,000 euros ($9,800) and 16,000 euros for the licenses, which will be valid for two years.

This is peculiar to me and I was wondering how the fee schedule works? Do you pay less for a license if you are only defending small vessels, or what? Or do you pay more if you are a foreign security company versus a national one? We will see…

The last part of this article also mentioned some key statistics. Like ‘German shipping companies operate the third largest merchant fleet in the world’! Specifically, they mentioned these numbers.

German shipping companies operate the third largest merchant fleet in the world. However, only a small proportion flies under the German flag. The country’s black-red-gold flag only flies on 492 ships. This makes the vessels German territory. Criminal offences on board, for example, are tried before German courts. On the other hand, 3,161 ships operated by German shipping companies sail under foreign flags. Shipowners, unions and the government are aiming to bring a total of 600 ships under the German flag. But to date, this goal has shown little success.

492 ships flying the flag of Germany is a significant number of vessels to protect under this scheme. No telling how many of them transit through dangerous waters. But increasing that to 600 ships will only increase the odds of more work for security firms. Not to mention the 3,161 vessels out there operated by German shipping companies. Perhaps these security measures will bring more vessels back under their flag? –Matt

Germany plans to regulate anti-piracy security firms
July 19, 2012
Sea piracy off the coast of Somalia has dropped dramatically, in part as the result of private security forces accompanying the ships. The German government now wants to regulate their certification.
The German Cabinet has agreed on legislation to introduce a licensing procedure for security companies on board ships. The draft bill determines which requirements these firms have to fulfill if they are protecting German-registered vessels. The government coordinator for the maritime industry, Hans-Joachim Otto, welcomed the decision.

Happy 4th of July and I thought this was a cool little deal to put out there. Private industry or privateers were very much a part of this country’s war for independence. It is great that we have such a strong military now, but it is equally great that private industry is able to contribute if need be…and our early days is proof of that. –Matt